Tax Cuts for the Wealthy

       Supply siders will have us believe that tax cuts for the wealthy act as an economic stimulus. They do not. The reason for this is simple: unlike water, money flows uphill. No matter where money is injected into the economic system, it flows upward to the top.
       The purported theory behind giving tax breaks to the wealthy is that they will use the money to create jobs. President Bush has even called his tax cuts a jobs package. But that's mere sloganeering to hide the reality. Let me ask: who ramps up production in the absence of increased demand? No one. This is so obvious it's amazing that anyone falls for the jobs-package line of bull. Who hires extra help, especially in the absence of increased demand? Obviously, no one.
       What is one to do with such a windfall - assuming one is wealthy ewnough to receive one? Invest in something that pays dividends, perhaps, since taxes have been reduced or eliminated on such investments. But all the exchanges of stock by traders and investors do nothing to boost the kind of economic activity on which people's livelihoods depend. Demand-side stimulus is the only way to achieve the necessary momentum. I know I wouldn't hire extra help until demand picked up significantly and forecasts were for more increased demand.
       What does it take to boost demand? Simple, put the money in the hands of the working class. They will spend it! The $300 crumb Bush grudgingly tossed to the contemptible masses is a huge insult and is not a real tax cut. Bush adds injury to the insult by scooping out huge rebates for the wealthy.
       Everyone who got that $300 tax rebate immediately spent it, so whatever economic stimulus ensued was very short lived, perhaps a week or two - probably less than the margin of error of any system that could measure it. What if the majority of the tax cut dollars went to the working class? Imagine an extra hundred or two in every paycheck. Week after week, month after month. Now that that would be a stimulus.
       Here's a radical idea. Why not exempt the first, say, $20,000 or $25,000 of wages and salaries from tax. What do you suppose would happen with that money. It would be spent! It would be injected into the economy at the consumer level, greatly stimulating demand for goods and services. Companies would have to ramp up production and begin hiring additional workers. The economy would buzz. And all that money would trickle uphill as it always does, making the rich even richer. And that's the point, really. No matter where you inject the money, the rich get richer. Why not inject it at the bottom so that everyone benefits, not just the wealthy folks at the top?